M&S expects 300 million pounds profit reduction due to cyber attack

Marks & Spencer (M&S) has concluded the 52 weeks ended March 29, 2025, by achieving its third consecutive year of growth across sales, market share, profit, and return on capital. M&S's sales rose by 6.1 percent to 13.9 billion pounds and pre-tax profit increased by 22.2 percent to 875.5 million pounds, representing the highest figure in over 15 years.

Although the new financial year began with strong trading momentum, this trajectory has been significantly disrupted by a recent cyber incident. Nevertheless, the company has reaffirmed its commitment to its overarching strategy. The estimated financial impact, before mitigation, is projected to reduce Group operating profit by approximately 300 million pounds for the 2025/26 fiscal year.

Commenting on the financial performance, Stuart Machin, chief executive said, “Three years ago, we introduced our Reshaping M&S for Growth plan with the objective of protecting the magic of M&S and modernising the rest. Executing that strategy has delivered a third consecutive year of growth in sales and market share, profit and improving return on capital.

“There is no change to our strategy and our longer-term plans to reshape M&S for growth and, if anything, the incident allows us to accelerate the pace of change as we draw a line and move on,” Machin added.

Cyber attack casts shadow on near-term outlook

The company's immediate response involved teams working around the clock with suppliers and partners to contain the incident, stabilize operations, and proactively minimize disruption for customers. M&S anticipates offsetting part of the estimated financial impact through cost control, insurance recoveries, and trading measures.

“Over the last few weeks, we have been managing a highly sophisticated and targeted cyber-attack, which has led to a limited period of disruption. We have tackled this head on with incredible spirit, teamwork and a deep sense of responsibility as we prioritised serving our customers,” Machin said.

The company expresses confidence in "returning to the performance levels seen immediately prior to the incident and throughout 2024/25" by the second half of the year.

Review of M&S financial results

Despite the strong underlying operational figures, statutory profit before tax decreased by 23.9 percent to 511.8 million pounds.

The Fashion, Home & Beauty delivered a sales increase of 3.5 percent to 4.2 billion pounds with like-for-like (LFL) sales up 4.4 percent. The division's profitability also saw an uplift, with adjusted operating profit rising to 475.3 million pounds, pushing the adjusted operating profit margin to 11.2 percent.